Old questions still haunt home sales despite new law

Article Abstract:

TRA '97 mandates that a significant amount gained from the sale of a principal residence can be tax excluded. Under the old law, taxpayers are allowed to defer taxation of the gain either by buying another home for at least the sale price or if they were the right age when the sale was made. Aimed to eliminate the complications of the old law, TRA '97 has repealed Sec 1034, rollover of gain and Sec 121, which refers to an exclusion in tax for sold residences that were once used as principal residences for at least two of the last five years. The new law has also resolved some tax fiascos related to divorce, involuntary conversion and death that may arise under the old law. Despite the benefits of the new law, however, a taxpayer still has to prove that the property was used as a residence and that any land and additional structures sold were reasonable vis-a-vis the residence.

Tax Deductions & Exemptions, Tax reform, Tax deductions, Tax shelters, Tax exclusion

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Some inventory shrinkage estimates are acceptable

Article Abstract:

The author discusses the allowable use of inventory shrinkage estimates for tax purposes with a focus on IRC section 471 and three Tax Court cases.

United States, Tax Law, Accounting Methods, Tax accounting, Accounting and auditing, Accounting, Inventory shrinkage, Inventory shortages

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